Money transfer firm Wise has been rebuked by a group of MPs after it suddenly froze the account of a non-profit drug policy organisation and prevented its staff from being paid, City A.M. can reveal.
In a letter to Wise chief Kristo Käärmann seen exclusively by City A.M., the co-chairs of the All-Party Parliamentary Group for Drug Policy Reform said they were “very concerned” over a move to suddenly freeze and shutter the account of not-for profit International Network of People who use Drugs (INPUD), which advises groups including the United Nations and UK government on drug policy.
MPs Jeff Smith and Crispin Blunt, co-chairs of the group, warned in the letter that the move could have a “number of troubling impacts both at the global and national level” and have demanded a response from Wise into the reasons for the freeze.
“We are writing jointly to express concern at the sudden and arbitrary nature of this decision and to request a full explanation for the decision regarding INPUD’s account,” they wrote.
“We request a reconsideration of the decision or reopening of this case given the impact that it has on the organization and the constituencies they serve.”
INPUD has drafted a number of papers in collaboration with the United Nations and has worked with the United Nations Office on Drugs and Crime (UNODC), as well as helping to shape Joint United Nations Programme and World Health Organization (WHO) policies and programmes on HIV/AIDS.
But global employees and partner projects of the organisation have now been left without funds as INPUD remains shut out from more than $500,000, City A.M. understands.
The MPs requested that Wise now takes steps to allow INPUD to access its cash to “ease financial burdens on the organization”.
The move to freeze the organisation’s account comes amid heightened regulatory scrutiny of Wise, after it was fined $360,000 last week by Abu Dhabi Global Market’s Financial Services Regulatory Authority over failures to properly implement anti-money laundering controls.
In a statement, the regulator said that Wise “did not establish and maintain adequate AML systems and controls to ensure full compliance with its AML obligations”.
Wise said today it “cannot provide any details on individual cases” but rejected suggestions by a source close to the charity that the decision to shut INPUD’s account was linked with fines from the UAE regulator.
“Account closures can happen for various reasons and have always been part of our regulatory processes,” a spokesperson for Wise said.
The latest calls from MPs add to the woes of Wise after the UK’s Financial Conduct Authority said last month that chief Kristo Käärmann was under investigation after he was found to have deliberately defaulted on his taxes by tax authorities.
Wise has now unfrozen the accounts of INPUD.